Singapore (5 December, 2020) – Sabana Shariah-Compliant REIT and ESR-REIT’s hopes to be the fourth largest REIT in Singapore have been dashed.
The manager of Sabana Shariah-Compliant REIT announced Friday that the resolution to amend the REIT’s trust deed was not passed at Sabana’s extraordinary general meeting.
Consequently, the scheme meeting to vote on the proposed merger with ESR-REIT was not convened.
As the merger is conditional upon, amongst other things, unitholders’ approval for the amendments of Sabana REIT’s trust deed, the implementation agreement the Manager had earlier entered into in connection with the merger has therefore been terminated, and the merger has lapsed.
Donald Han, Chief Executive Officer of the Manager, commented: “We would like to thank everyone who voted, and we respect their decision. While we believe the Merger has a compelling strategic rationale, unitholders have expressed that they prefer for Sabana REIT to remain as a standalone REIT. We are heartened by their confidence in Sabana REIT’s prospects and remain committed to continue creating value for all unitholders.”
The failed scheme is a victory for many of Sabana’s unitholders who have expressed unhappiness over the proposed merger. Sabana Shariah-compliant REIT is the only Shariah-compliant REIT by constitution listed on the SGX, while ESR-REIT is Shariah-compliant as it meets the Shariah-compliant parameters defined by Yasaar Ltd.
It was however announced that post-merger, the new enlarged entity would be the fourth largest REIT by market share and fifth largest in Singapore by asset size.
The managers announced that the enlarged entity would have a new refinanced debt of S$1.6bn out of total assets of S$4.1bn.
Based on Yasaar Ltd.’s Shariah screening methodology that stipulates a company’s debt to total assets must be less than 33.333% to be in compliant with the Shariah, the new entity would have been a non-compliant outfit.
If the merger had gone through, Sabana Shariah-compliant would be de-listed from SGX and ceases to exist.-/- www.halaluniverse.net
